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Hungary under fire

published by EuVI on Wed, 02/15/2012 - 19:39

The recent exchange of highly tense letters in December 2011 between European Commission President José Manuel Barroso and Hungarian Prime Minister Viktor Orbán, and the ahead of scheduled departure from Budapest of the joint EU – IMF negotiating team preparing the talks on a new IMF – loan were just two signs the current Hungarian center – right government of Prime Minister Orbán has strained relations with key Western leaders. At the center of the Barrosso – Orbán dispute was a new legislature on the Central Bank of Hungary, which critics say could harm the independence of the bank, but it is hardly the only issue spurring tensions between Budapest and Brussels, and in a broader picture, Budapest and the “West”.

After the first weeks of January, as Hungary’s new basic law came into force, the government faced increasing international pressure from leading Western governments to change course. For days Hungary was at the cross-hairs of the international press, while at the same time the Hungarian Forint hiked to record lows against key currencies. Under growing international pressure, and with the government in growing need of an IMF-EU safety loan, since the second week of January, the Hungarian government has begun to signal it is open to revise most of the criticized measures.

Critics of Prime Minister Orbán say the tensions are only the result of the current government’s goal of expanding and cementing its power. True, since taking office in May 2010, the Hungarian government has received some critical remarks even from such well respected institutions as the Venice Commission of the Council of Europe on the new Hungarian basic law, not to mention other more harsh criticisms on numerous issues coming from Western politicians and even the US State Department.

Transforming Hungary with the two-thirds majority

Indisputably a lot of the regulations, appointments approved by the Parliament favor Fidesz, the ruling center-right party, and its bur directly or indirectly. One obvious example is the recently adapted law on elections, which includes new voting districts drawn to favor to some extent Fidesz, which the opposition fear could cement the power of the ruling party for the years to come. But in the eyes of Viktor Orbán and his supporters, it was the previous twenty years from voting districts favorable to the socialist party to media regulation and to a whole range of other regulations and institutions which was unfair, undemocratic and ultimately unsuccessful: all results of the unfinished, messy, and corrupt political transformation of 1989-1990. And with two thirds majority in Parliament since the elections of April 2010, the government perceives it has the mandate to finally transform the Hungarian political system for good.

Even though the Prime Minister came under growing pressure from the West because of his policies on democratic institutions and unorthodox economic policies based on the concept of “economic freedom fight”, domestically, he was still up for the fight. So what was, and to some extent, still is behind this determination?

Orbán has been deeply involved in Hungarian politics ever since the late 1980s, it would be misleading to drive down his current concept of governance, policies and his view on the “West” only from his recent tenure as Prime Minister, or from his supposed quest for stabilizing his power. More importantly, it would not explain why is Orbán, being under fire from all fronts from the outside, is still popular on the right, even though he has received some criticism from his own political side as well. There is a long history of specks in the eyes of Orbán – and with him, a large proportion of his political supporters on the right – when it comes to Western leaders and their approach to Hungarian politics.

Past experience and perceptions of the West – from the right

As for domestic politics, it was the West who accepted the political descendents of the communist regime as authentic democratic partners in the 1990s, while being much more suspicious with parties on the right in fear of their supposed nationalism. It was the West who followed with suspicion the policies with which the previous and the current Orbán – government tried to improve the situation of the three million ethnic Hungarians living in neighboring countries, even though these policies never went further than supporting autonomy for these minorities or providing them dual citizenship – both a common European practice.

It was the West which hardly protested after socialist Prime Minister Ferenc Gyurcsány did not step down after his infamous “Öszöd – speech” in 2006, in which he admitted the socialist’s policies and campaign running up to the 2006 elections where based on lies. And it was the West which did not stood up against the brutal police abuses in the fall of 2006 during the demonstrations calling for Gyurcsány to step down.

As for economic policies, in the perception of the government and its supporters, it was the West who pressed Hungary to adopt neo-liberal economic policies (liberalization, deregulation, privatization) from the early 1990s, which was partly responsible for the current global economic crisis – and it was the Hungarian political left which much more so cheered for these policies, while the Hungarian political right was more cautious.

It was the West who urged “wild” privatization in the early 1990s, exceeding the levels of every other ex-communist neighboring country, which is largely responsible for today’s unhealthy dual economic structure in Hungary, with relatively healthy foreign owned multinational companies and struggling Hungarian firms. It was the West, and the IMF in particular, which forced the Hungarian government to introduce the obligatory private pension system in 197, which then created huge yearly deficits for the annual budgets, and according to a 2008 IMF study on Pension Privatization and Country Risks, wasn’t such a good idea after all. And it was the West who now criticize the Orbán government for eliminating this obligatory private pension system. It was mostly western owned banks, who heavily contributed to and profited from the irresponsible foreign currency based lending in the last decade and then did not share their fair burden after the crisis hit – until the Orbán- government introduced extra taxes on them.

Constant solid base for Prime Minister Orbán

Of course one can debate the extent of the truths in the above mentioned statements. But it is hardly debatable that a considerable proportion of Hungarian society, especially those on the right, agrees with the above listed perceptions, which recent polls conducted by Hungary based research think – tank Tárki seems to reinforce. Fidesz is still leading the polls with more than 20% ahead of radical right party Jobbik and socialist MSZP, both around 10%, and Prime Minister Orbán is still the most popular politician after President Pál Schmitt. Although the government had to face the first significant opposition demonstration on January the 2nd, with a number of participants estimated to be around 50,000, on January the 21st supporters of the government managed to take by orders of magnitude larger number of people to the streets in a demonstration in support for the government.

So even if in the current EU vs. Hungarian government battle Orbán will have no other option than to compromise, which seems highly likely at this moment, he would be considered by many in Hungary as a politician simply failing to be realist enough in measuring his room for manoeuvre – but on the other hand, still considered to be a politician ultimately fighting – and loosing – for the “right” cause.